Yield Production

Yield Production (Multiple Peril Crop Insurance)

Coverage is based on the producer’s APH (Actual Production History) and the price is set by the Federal Crop Insurance Corporation. If production is below the guarantee the producer gets paid the number of bushels lost, times the set price per bushel.

Advantage: It is cheap to buy and is simple to understand.

Disadvantage: It is risky and harder to make any commitment with your crop, such as forward contracting, feeding or using the crop for security on a loan.

If you do not get a crop and you need the feed or the grain for a contract, and the price goes up in the fall, you need to come up with the extra dollars to buy the grain to feed or to deliver. If the price at harvest time is poor and the producer still has an average yield he will get low revenue from his crop.